Heat oil in a kadai over medium heat. Add cumin and mustard seeds and let them sizzle.
Add the bay leaf, star anise, cinnamon stick, green cardamom, and cloves.
Add the curry leaves and the sliced onions. Saute the onions until they turn a light golden colour.
Add a pinch of asafoetida, the pounded ginger-garlic-green chilli paste, and saute for about one minute.
Mix in the turmeric powder and the chopped tomato. Saute until the tomato softens.
Turn the heat to low and add cumin powder, coriander powder, red chilli powder, garam masala, and salt. Mix well.
Add the soaked and drained masoor dal to the kadai and mix thoroughly with the spices.
Add the cubed potato and mix well so the potatoes are coated in the masala.
Pour hot water into the kadai and mix. Add enough water to reach your desired consistency, as the curry will thicken as it cooks.
Cover and let the curry simmer on low to medium heat for 10–15 minutes, or until the dal and potatoes are tender.
Garnish with fresh coriander before serving.